A sign for BlackRock Inc hangs above their building in New York.
Lucas Jackson | Reuters
Governments should be leading the global economy’s sustainable transformation, not markets, according to author and economist Ann Pettifor.
Pettifor, author of “The Case for the Green New Deal,” told CNBC on Friday that a reliance on financial markets to steer the economy away from fossil fuels was “not tenable.”
She argued that since markets and societies have different interests, government intervention would be necessary to engineer a new Green Deal with state funding. A so-called Green Deal for the global economy would see ambitious — and likely costly — targets set in an effort to move the world away from fossil fuels and reduce greenhouse gas emissions.
“We know that governments can intervene. We know that we have developed an advanced monetary system that will enable us to mobilize large sums of finance, and we did that for Wall Street, we did that when dealing with the pandemic, we know governments can do this and therefore I want to see the state take much more of a role,” Pettifor told “Squawk Box Europe.”
“I want to see public authority over the system of transformation and not private authority. I want to see the EU leading this, not BlackRock,” she added.
Her comments come after BlackRock CEO Larry Fink penned an annual public letter to CEOs in which he dubbed the transformation toward a green economy as a “historic investment opportunity” and called for greater disclosure from companies as to how they will survive in a world of net-zero greenhouse gas emissions.
Fink has maintained that climate risks and investment risks are one and the same, meaning investment managers have a fiduciary duty to direct capital toward assets seeking to address climate change.
In an interview with the Financial Times in January, Fink likened the prospective boon for climate investing to his early days trading mortgage-backed securities in the 1970s.
“In five straight years we elevated it to becoming a dominant component of global capital markets. It might take 10 years, not five years, for sustainability. But the underlying potential is huge,” Fink told the FT.
Mortgage-backed securities — bonds consisting of bundles of home loans purchased from the issuing bank — would go on to play a key role in triggering the global financial crisis in 2008.
“If (Fink) is going to extract from our ecosystem the kind of rates of return that his company extracted from mortgage securities and from our financial system, then we are in very deep trouble,” said Pettifor, who is also a director of the Policy Research in Macroeconomics network.
“He is right. He is thinking about this in terms of making huge profits for his business, but when we are talking about the finite resources of the ecosystem, this cannot be exploited for the profits of individual companies or full markets. The ecosystem is here to serve the survival of humanity.”
In its January client letter, BlackRock emphasized that retaining carbon investments in its portfolios was part of its fiduciary duty to clients.
“Because the global economy today is itself carbon intensive, the portfolios of most diversified investors – including the portfolios of BlackRock’s clients in aggregate – remain carbon intensive,” it said.
“That cannot and will not change overnight, and BlackRock’s aggregate portfolio will necessarily be subject to the investment decisions of our clients. Nonetheless, there is significant global momentum towards a net zero economy, and BlackRock believes that our clients are best served by being at the forefront of that transition.”
Since the landmark Paris Agreement in 2016, 60 of the world’s largest commercial and investment banks have invested more than $3.8 trillion into fossil fuels, according to a report published Wednesday by a collection of climate organizations.
Pettifor argued that tighter regulation on banks and investment managers is necessary to restrict fossil fuel investment, and accused governments of “profound ignorance” for allowing the same institutions that are investing in fossil fuels to take the lead on the climate transition.
“There was no change made after the last great financial crisis, and that was because they simply lobbied congress, lobbied parliaments and ensured that no changes were made and they could carry on as before,” she said.
In 2011, three years after the brunt of the crisis, the National Bureau of Economic Research published a study showing that the worse a bank’s loans performed during the crisis, and the greater its bailout package, the more aggressively it had lobbied against big regulatory reform.
“Until we actually get a grip on these companies and limit their ability to keep fueling fossil fuels, and therefore greenhouse gas emissions, there is really no hope for our future,” Pettifor added.
Biden announces U.S. troops to leave Afghanistan by Sept. 11
US President Joe Biden speaks during remarks on the implementation of the American Rescue Plan in the State Dining room of the White House in Washington, DC on March 15, 2021.
Eric Baradat | AFP | Getty Images
WASHINGTON – President Joe Biden said Wednesday that he will withdraw U.S. combat troops from Afghanistan by September 11, ending America’s role in what has become its longest war.
The removal of approximately 3,000 American servicemembers coincides with the 20th anniversary of the Sept. 11, 2001, terror attacks which spurred America’s entry into lengthy wars in the Middle East.
“It is time to end America’s longest war,” Biden said. “It is time for American troops to come home.”
Biden said that he coordinated his decision with international partners and allies as well as with Afghan President Ashraf Ghani. The withdrawal of U.S. troops will begin on May 1. Following his remarks, Biden said he would visit Section 60 at Arlington National Cemetery, the final resting place for Americans killed in Iraq and Afghanistan.
Ghani said he spoke with Biden and respects the U.S. decision to withdraw its forces. Ghani said Afghanistan’s military is “fully capable of defending its people and country.”
A senior administration official, who spoke on the condition of anonymity, said Tuesday that the orderly withdrawal of U.S. and foreign troops from the war-torn country could happen well before September. The official added that Washington is prepared to “strike back hard” if American troops are attacked ahead of the September departure.
CIA Director William Burns acknowledged in testimony before the Senate Intelligence Committee Wednesday that Washington’s ability to act on threats will be diminished by the U.S. withdrawal. However, Burns said some U.S. capabilities will remain in place.
“When the time comes for the U.S. military to withdraw, the U.S. government’s ability to collect and act on threats will diminish. That’s simply a fact,” Burns said.
“It is also a fact, however, that after withdrawal, whenever that time comes, the CIA and all of our partners in the U.S. government will retain a suite of capabilities, some of them remaining in place, some of them that we will generate, that can help us to anticipate and contest any rebuilding effort,” Burns said.
Lance Cpl. Patrick Reeder, with Combined Anti-Armor Team 2, patrols in Nawa district, Helmand province, Afghanistan, Oct. 28, 2009.
Marine Corps photo by Lance Cpl. James Purschwitz
In February 2020, the Trump administration brokered a deal with the Taliban that would usher in a permanent cease-fire and reduce further the U.S. military’s footprint from approximately 13,000 troops to 8,600 by mid-July last year.
By May 2021, all foreign forces would leave Afghanistan, according to the deal. The majority of troops in the country are from Europe and partner nations. About 2,500 U.S. service members are now in Afghanistan.
Under the agreement, the Taliban promised to not let terrorist groups use Afghanistan as a base to launch attacks against the U.S. or its allies and agreed to conduct peace talks with the central government in Kabul.
The White House, when pressed Wednesday about whether the Taliban will use the U.S. withdrawal to topple the central government in Kabul, said it expects the militant group to abide by its commitments.
“We have an expectation that the Taliban is going to abide by their commitments and that they are not going to allow Afghanistan to become a pariah state. That’s our view, that’s also in their interests,” White House press secretary Jen Psaki said.
However, the Taliban said earlier this week that it will not attend a summit on Afghanistan in Turkey set for later this month and will not attend any conference until foreign forces leave the country.
Last month, Biden told reporters during his first press conference that he could not yet commit to the May 1 deadline. “It’s going to be hard to meet the May 1 deadline,” Biden said, adding, “it is not my intention to stay there for a long time.”
When asked if U.S. service members would remain in Afghanistan another year, Biden said he did not see that being the case.
“We are not staying a long time. We will leave, the question is when we leave,” the president said, adding that his administration was in consultations with NATO allies and partners in the region.
The announcement to leave Afghanistan comes on the heels of a Wednesday meeting between NATO allies and Secretary of State Antony Blinken and Secretary of Defense Lloyd Austin. NATO joined the international security effort in Afghanistan in 2003 and currently has more than 7,000 troops in the country.
“Our allies and partners have stood beside us shoulder to shoulder in Afghanistan for almost 20 years and we are deeply grateful for the contributions they have made to our shared mission,” Biden said. “The plan has long been in together and out together.”
The wars in Afghanistan, Iraq and Syria have cost U.S. taxpayers more than $1.57 trillion collectively since Sept. 11, 2001, according to a Defense Department report.
Powell calls cryptocurrencies ‘vehicles for speculation’
Federal Reserve Chair Jerome Powell holds a news conference following the Federal Reserve’s two-day Federal Open Market Committee Meeting in Washington, July 31, 2019.
Sarah Silbiger | Reuters
Cryptocurrencies are largely for making bets on price increases and haven’t reached the status of payment mechanisms yet, Federal Reserve Chairman Jerome Powell said Wednesday.
“They’re really vehicles for speculation,” the central bank leader told The Economic Club of New York in a virtual interview with David Rubenstein, co-founder of the Carlyle Group. “They’re not really being actively used as payments.”
Powell compared crypto to gold.
“For thousands of years, human beings have given gold a special value that it doesn’t have” as an industrial metal, he said.
The comments come the same day as Coinbase goes public in a direct listing on the Nasdaq, an exchange that is weighted with tech companies.
Coinbase is the predominant exchange for trading bitcoin and other cryptocurrencies. It opened at $381 a share, well above its $250 reference price. The company said it generated $1.8 billion in revenue for the first quarter amid wild price gains for bitcoin, ethereum and other crypto names.
Powell’s predecessor at the Fed, Janet Yellen, is now Treasury secretary. In February, she told CNBC that she views bitcoin as “a highly speculative asset” and said it is not “widely used as a transmission mechanism” and is an “extremely inefficient way of conducting transactions.”
Along with a brief chat about crypto, the Powell interview encompassed a variety of other subjects, much of it familiar ground for the Fed leader.
One revelation was that Powell has yet to meet with President Joe Biden.
Fed watchers have been speculating as to whether Biden will give Powell another term as chair when the current one expires in 2022. Asked in a “60 Minutes” interview that aired Sunday on whether he wants another term, Powell demurred, saying he’s focused on “doing the best job I can.”
Powell said he has had no contact with Biden since the latter became president nearly three months ago.
Asked if he’s ever met Biden, Powell said, “I think I’ve shaken his hand, but I have not really met him and talked to him.”
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Xpeng Motors launches P5 Lidar electric car to rival Tesla in China
Xpeng Motors launches the P5 sedan at an event in Guangzhou, China on April 14, 2021. The P5 is Xpeng’s third production model and features so-called Lidar technology.
Arjun Kharpal | CNBC
GUANGZHOU, China — Chinese electric vehicle maker Xpeng Motors launched the P5 on Wednesday, a sedan with new self-driving features, as it looks to race ahead in China’s ultra-competitive auto market.
The P5, Xpeng’s third production model and second sedan after the P7, adds another competitor to Tesla’s Model 3 in China’s increasingly crowded field of electric car-makers.
But in an interview with CNBC on Wednesday, Xinzhou Wu, vice president in charge of autonomous driving at Xpeng, said the P5 will be priced lower than the P7.
“At this price range with the features we put in the car, I think it will be quite compelling for our customers,” he said.
The P7 starts from 229,900 yuan ($35,192) after subsidies. In comparison, Tesla’s Model 3 in China starts at 249,900 yuan.
Wu said the P5 would roll out to customers in China in the third or fourth quarter of this year. Xpeng has also expanded into Norway, its first international market. Wu said that the company will expand its footprint in northern Europe and the P5 would eventually be launched there. He gave no timelines on when this might happen.
Xpeng has tried to push the advancement of its self-driving features to differentiate from its competitors.
The P5 is equipped with so-called Lidar, or Light Detection and Ranging technology. Lidar systems send out lasers that bounce back and can measure distance. Those returning beams are processed by an algorithm to create a three dimensional representation of surrounding objects — a key technology for autonomous vehicles to understand their environment.
Xpeng claims that Lidar can help the P5 distinguish pedestrians, cyclists and scooters as well as road works — even at night and under low-light conditions.
On Wednesday, the Chinese vehicle maker also released a new version of XPILOT, its so-called advanced driver-assistance system (ADAS). This refers to a system with some autonomous features but where a driver is still required.
XPILOT 3.5 will have an updated version of a feature called Navigation Guided Pilot or NGP, which allows users to autonomously do tasks such as changing lanes or overtaking cars. Some of these features will work on city roads for the first time. Previously, NGP was just designed for highways.
Xpeng’s XPILOT is an attempt to compete with Tesla’s own ADAS system called Autopilot as well as other rivals like Nio with its Nio Pilot.
“In P7 we launched NGP … only on highways. But highway driving only occupies like 10% of peoples’ driving time. Being able to bring the technology and the capability to cities is very important to make the feature more usable and more compelling to Chinese customers,” Wu said.
In the city, Wu said the situation was becoming “exponentially” more difficult, citing challenges in ensuring the car can recognize objects in its path accurately and reliably. “We believe with Lidar … it will help us achieve our goal much faster and gives us an edge against our competitors.”
China’s electric car market is expected to pick up this year with 1.9 million units expected to be sold, growing 51% year-on-year, according research firm Canalys.
Various incentives from the government, such as subsidies, have helped China become the biggest electric car market in the world. With that, a number of start-ups have grown rapidly such as Xpeng, Nio and Li Auto.
But these players are competing against traditional automakers who are boosting their electric vehicle capabilities as well as other technology firms entering into the fray.
Last year, Xpeng delivered 27,041 vehicles, more than doubling from 2019. In comparison, Tesla’s Model 3 alone sold more than 137,000 units in 2020 in China.
Wu said Xpeng has developed a lot of technology which he believes gives the company an edge.
“We are definitely a step, a few steps ahead, you know as compared to most of our competitors. So we are pretty confident that we can win this race even with more newcomers into this space,” Wu told CNBC.
“We believe that with this kind of focus on the Chinese market, Chinese customers, Chinese road conditions and also the different technologies we bring together to make the tech better fitted to China market, I think we do have an edge as compared to Tesla in the China market.”
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